The opposition has poured scorn on an International Monetary Fund study that suggests
John Howard
was Australia’s most wasteful prime minister, saying the last Coalition government set the nation up to cope with the global financial crisis.

A working paper by researchers at the Washington-based organisation, looked at two centuries of government spending across 55 economies to identify periods of “fiscal prudence" and “fiscal profligacy".

Australia saw two eras of such waste, both of which occurred under Mr Howard – in 2003 just as the mining boom started, and between 2005-07, according to the study, which does not represent the official views of the IMF.

Shadow treasurer Joe Hockey said the Howard-Costello government was among the most responsible in Australia’s history and the IMF had in fact praised it in the past.

IMF working paper graph key.
AFR

Mr Hockey pointed to an IMF report in 2007 that said: “Executive directors commended the Australian authorities for their exemplary macro-economic management, which is widely recognised as being at the forefront of international best practice . . . Additional revenues resulting from the terms of trade boom have been managed prudently, and the 2007-08 budget continues appropriately to target budget surpluses."

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“The study shows the Howard government clearly missed opportunities to effectively use the mining boom and strong global economic conditions to invest in Australia’s future, and it debunks the myth spouted by
Tony Abbott
and Joe Hockey that the Howard government exercised spending restraint," Senator Wong said.

“The Howard government made spending decisions that made the budget unsustainable."

A spokesman for Mr Howard said government spending, as a percentage of GDP, fell during his tenure.

“According to none other than the governor of the Reserve Bank, Australia’s fiscal position is the envy of the developed world," the spokesman said.

Former Howard chief of staff and now Senator
Arthur Sinodinos
questioned the report’s credibility, saying it was “odd" that it failed to regard the Whitlam period as wasteful.

The report also suggested that Greece – the world’s pin-up nation for government mismanagement – enjoyed a few periods of fiscal prudence.